Have Donald Trump's policies had a big impact on the U.S. economy and its competitiveness? The answer, we think, is an obvious yes. Now comes a new report, based mainly on "hard" data, that confirms that.
The report comes from the IMD Competitiveness Center in Switzerland. Each year it ranks countries by 256 different variables to come up with its global competitiveness rankings.
For 2018, there was a surprise: The U.S. leapt three places to take over the top spot in global competitiveness — just ahead of Hong Kong, Singapore, the Netherlands and Switzerland. That jump was based on its "strength in economic performance and infrastructure," ranking first in both areas.
That this is so shouldn't shock anyone with any knowledge of what's going on in the economy.
Since Trump took office, GDP growth has averaged 2.9%, up from 2% under President Obama. Unemployment now stands at 3.9%, and jobless rates for African-Americans, Asians and Hispanics are at or near all-time lows.
Inflation, at about 2%, remains under control. Business investment is surging, and a big reason for that is that corporate taxes are low, thanks to Trump's tax cuts.
Meanwhile, Trump continues to slash away at the thicket of regulations that strangles the U.S. economy, costing us collectively nearly $2 trillion a year. All of this has helped to fuel an economic renaissance of sorts. U.S. households are $7.1 trillion richer since Trump entered office, thanks to rising share prices and strong real estate markets.
Just to be clear, we're not citing this one report as a be-all and end-all for competitiveness or even for the fate of the economy. Nor are we in the forecasting business.
But others are, and among them have been some of Trump's fiercest critics. To read what they wrote and said, the U.S. returning to No. 1 in competitiveness wouldn't just be unlikely — it would be impossible.
Just last November, for instance, a blog post on the Economic Policy Institute's website informed us that "Republican tax plan will reduce American competitiveness." That was, to be kind, wide of the mark.
Similarly, the liberal Brookings Institution opined in March of last year that "Trump's 'America First' budget will leave the economy running behind." Didn't happen.
Going back even further, many economists and pundits were wrong — dead wrong — about Trumponomics. But to this day they can't bring themselves to admit it. Imprisoned by the illogic of their own liberal ideology, they all saw not just failure, but instant disaster. They still do.
We've run the following quotes in IBD before, but in light of this new report they bear repeating:
"We are probably looking at a global recession, with no end in sight," said New York Times columnist and Nobelist Paul Krugman, just one day after Trump won the election.
"Under Trump, I would expect a protracted recession to begin within 18 months. The damage would be felt far beyond the United States," said Larry Summers, the former top economist for Presidents Bill Clinton and Barack Obama, speaking in the summer of 2016.
"If the unlikely event happens and Trump wins you will see a market crash of historic proportions," agreed MSNBC's Steve Rattner, a former Obama administration official, speaking in October of 2016.
3% Growth Is Possible
As we said, when it comes to the economy, past performance is no guarantee of future results. And sure, Trump or Congress or the Fed could make big mistakes that would cause an economic hiccup or even a recession.
But let's focus on policies, not personalities, and facts, not opinions, when it comes to performance. And in doing so, by any economic measure you might make, the U.S. is doing better today than it was when Trump was elected.
Moreover, Trump might be on the verge of another big win over his critics in the media and economics profession.
Recall that when Trump promised 3% growth, he was roundly criticized and even ridiculed for what many claimed was pie-in-the-sky political hyperbole. Some even said such growth would be impossible.
But, as we noted, GDP growth has averaged 2.9% since Trump moved into the White House, just a hair under 3%. If the Atlanta Fed's GDP "Nowcast" — which uses current data to make up-to-date forecasts — is correct, 2018's second quarter could see growth of as much as 4%.
That would push average growth above 3% for Trump's term. If so, that would be yet another "crazy" idea that Trump had that turned out to be true.
While all those dire prognostications we mentioned proved false, the media continue to quote those who made them uncritically.
It seems that among the media and the Beltway and coastal elites, no distortion of Trump's many successes ever gets corrected — only repeated. And facts are never acknowledged — only ignored or distorted.